Sources told FT that Trustly was in talks for several weeks with numerous potential investors before aiming for a valuation of about $8.2 billion-$8.8 billion. The company is hoping to raise roughly $930 million. Its majority shareholder, Nordic Capital, will sell down its stake.
“It’s a way to ensure that the business can remain independent. The company reached the size where it started to grow too big for a private environment, ”Johan Tjarnberg, chairman of Trustly, told FT.
Trustly’s platform doesn’t use card networks. Instead, the Stockholm startup, which was founded in 2008, created its own network that facilitates payments directly from customers’ bank accounts. Tjarnberg said that by cutting out the middleman — the card networks — merchants will save about 50 percent in fees. He also said he is targeting a “rule of 80” for about five years — which means sales growth and profit margins would always be more than 80 percent, per FT.
In 2020, Trustly processed $21 billion in transactions, 40 percent more than in 2019. The company’s CEO Oscar Berglund told FT that younger shoppers largely are not interested in credit cards or buy now, pay later (BNPL) options.
Trustly first started putting out feelers for an IPO in January at an $11 billion valuation. The company posted revenue of $147 million in 2019. Nordic Capital acquired an $800 million majority stake in Trustly in 2018. Trustly merged with its competitor PayWithMyBank in 2019.
Berglund said in a recent report to shareholders that aside from having record profits in 2020, Trustly also added 55 million additional customers. The company also connected 2,500 merchants and 1,400 new banks last year.
Trustly got an infusion of fresh capital in June of last year from Blackrock Capital and a slate of institutional investors that included Aberdeen Standard Investments, Neuberger Berman, Investment Corporation of Dubai and RSIC. The funds were earmarked for expanding its network.
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